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Payday Loans Tips

Not surprisingly, more and more people in Sweden are opting for SMS lån But is there anything special about the SMS loans that are enticing people? In this content, we will provide you with information on why the industry is highly growing plus the pros and cons of these loans.

Why the payday loans industry is highly growing

According to some experts, the recession was the primary cause of SMS lending boom. After times became tough and getting money became hard, unsecured loans presented a more convenient opportunity to individuals. With the loans, getting money to help their family survive became easier, and lots of people also realized that the loans were more useful than they thought.

Even after things had evened out and recession was over, the SMS lending growth continued. Some people may argue that this resulted from the cost of living becoming higher and higher. Also, today everything costs more than it used to do some years ago. As a result, most families hardly keep up with rent and bills payments in most areas within Sweden. Therefore, for most of them, the easier way is to apply for the payday loans and to get instant money to pay for whatever they need. And because the cost of living is always increasing, expectedly, the payday loans market growth will continue.

What are the pros and cons of SMS loans (lån) in Sweden?

Pros:

– Easier loan application process

According to most people, the loans are easier to apply for and moreover, they are a better option for individuals in need of instant cash. The application process will take around 10 minutes. This is something most people can do during their lunch break or while in their workplaces. And mostly, the payday lenders will deposit the money into the customers’ bank account within 24 hours. Most borrowers receive the money after a few hours – after approval.

– Faster loan approval

The loans approval is usually very fast. In other words, after applying for the loan, you won’t need to wait nervously. What’s more, you won’t need any collateral to secure the payday loan The lenders will approve your loan depending on your affordability and credit assessments. People with bad credit scores rarely get these loans. The approval speed highly depends on the lender’s applications processing but typically, people do not wait for long.

– The payday loan won’t tie you to long term contracts

In nature, payday loans are short term – you are getting instant cash on the next paycheck. Therefore, the loans do not exceed 30 days. This feature attracts most people particularly those who hate the idea of committing to lengthy agreements with lenders – everything ends in less than a month.

– SMS loans can be a better alternative to the typical personal loans

To apply for a standard personal loan, you will have to go to your bank in person. In addition to that, the bankers will bombard you with questions relating to your financial situation and life – they need to know exactly why you require the loan and how you will spend the money. This is intruding and may leave most individuals feeling frustrated. However, with payday loans, you only need to prove that you have a job, and the loan is affordable.

Cons:

– Higher interest loans

Payday loans have their problems. One of these problems is the higher interest rates. However, the interest rates will be a problem if you aren’t smart with the loan.

– Higher charges and penalties

In addition to the higher interest rates, one should expect higher penalties particularly if you won’t repay the loan on time. The charges may be substantial and as a result, make your financial situation difficult to control. If you happen to miss your payment date, the small loan will cost a fortune.

– They aren’t a long term solution

The payday loans will help you out of the trickiest situation, but relying on them each and every month isn’t the best idea. If your financial situation is terrible, don’t apply for an “SMS-lån”.

What do you do when you need money urgently, and nobody can lend you the right amount? You can’t ask your friends or family all the time, and a bank won’t give you a small amount for personal use.

For this type of situations, some financial institutions can offer you small sums of money for a short period. For example, if you need money right away for making a significant purchase, you can choose a financial institution, and they’ll give you up until $1000.

The payday loan is a short-term loan, and this means that you can take it for a short period, usually a month. The companies that offer these types of loan advertise them as funding for making an unexpected purchase that can arise at the end of the month, but before you received the salary.

The payday loan is arranged only over several days – no more than one month – so you can use the money for filling a gap until you receive your wage.

The Sum that You Can Borrow

Most of the financial institutions that offer payday loans won’t give you more than $1000 or the equivalent in another currency. When you make your first payday loan, you might be limited by the lender with a different sum of money. Apart from this, some lenders will accept a longer period for returning the money, but they won’t finance you with another short-term loan until you have paid everything.

How Expensive It Is

We know that there are also other alternatives to taking a payday loan, but if you use your credit card and make an unauthorized overdraft, you might pay more than the interest rate.

A payday loan can be expensive if you don’t pay it back in time because the interest rate will keep on adding to the initial sum of money. It can all start with a tiny loan, but you need to pay it in due time. Otherwise, you’ll pay extra interest and additional fees.

Adding Up

Many financial institutions that offer payday loans are deciding how fast the costs will add up. For example, if you have taken $100 from any of them for ten days, by the end of that period you can pay between $120. If you choose to roll over your loan for another ten days, you will have to pay about $140. It means that in less than a month, you will pay almost 50% extra to what you have taken from them.

Their calculations are so that they will always earn money from their clients because the loans are made for short-term periods.

The Interest Rate

As you certainly know, the interest rate is indeed high for the payday loan. The reason is simple – no matter what the interest rate is for the whole year (the APR), when you have a short-term loan, the interest rate (for that short period) will increase.
The calculation of the APR was not for a short-term loan, just for those loans that are spread over a few years or more. Because of this, it is hard for the customers to find out the real cost of the available loans.

Many consider that these loans are controversial because of the total sum of money that the clients have to pay back. It can be hard for those that have financial difficulties, but for those who stick to the payment plan, things can be easier compared to dealing with a bank.